Department of Defence Annual Report 2008-2009

| Department of Defence | Vote 19 |
REPORT OF THE ACCOUNTING OFFICER
for the year ended 31 March 2009 (continued)
06/07 AG
ANNUAL
REPORT
REF
RECOMMENDATIONS MADE
IN SCOPA RESOLUTIONS
DATED 8 FEB 08
DOD PROGRESS ON ACTION PLANS
Page
268-269
Page 194
Par 6 - Special Defence Account (SDA). The
Committee recommends that the Accounting
Ofcer ensures that:
a) the accounting framework applicable to
the SDA and the classication of the
SDA, which have been outstanding since
2004/2005, is claried with National
Treasury as a matter of urgency;
b) since the DOD has referred the matter
of the approval of the constitution of the
compliance programme to the Department
of Foreign Affairs, the Accounting Ofcer
should follow-up with the Department
of Foreign Affairs and report back to
Parliament within 60 days of the adoption
of this report by the National Assembly;
c) surplus funds not required for immediate
use are invested and withdrawn when
necessary; and
d) a policy governing investments of all
moneys to the credit of the account is
compiled with, approved and implemented
as a matter of urgency. If investing is not
the way to go, the Defence Special Account
Act, 1974 (Act No. 6 of 1974) must be
amended.
Par 7 - Catering services rendered in DOD as
conventional, outsourced and commercialised
messes. The committee recommends that the
Accounting Ofcer ensures that:
Classication. The DOD has decided not to proceed
with the reclassication of the SDA as a Schedule 4.
Framework. The National Treasury was approached for
guidance on the accounting framework for the SDA. In the
absence of an answer from the National Treasury and in the
light of the possible repeal of the Defence Special Account
Act to be included in the Public Finance Management
Bill the DOD recommended to the National Treasury to
proceed preparing the nancial statements for the SDA
on the entity-specic basis of accounting and it was again
approved for the 2008/2009 and 2009/2010 nancial
statements.
The DOD did submit this matter to the Department of
Foreign Affairs (DFA) on 14 March 2008. DFA has
since submitted a copy of the terms of reference of the
compliance programme that was signed into effect on 15
May 2008. This matter is regarded as nalized.
The DOD however is aware of the risk that funds in
the compliance programme are not utilised as agreed to.
Negotiations with the Department of Foreign Affairs
will continue to utilise these funds in accordance with the
agreement between the Governments of the RSA and the
USA.
The National Treasury instructed the DOD to, in spite of
the requirements of the Defence Special Account Act, not
invest the reserve funds of the SDA as it will not be in the
economic interest of the State. The investment policy is
currently in the approval process and will be promulgated
during the 2009/2010 nancial year. The DOD is in
process of disinvesting the amount of Rm 0,127 based
on the instruction by the National Treasury. Target date is
2009/2010 nancial year. The DOD has been requested to
participate in a NT workshop to discuss matters regarding
the SDA. The investment of the reserve of the SDA will be
an agenda point of the workshop.
The DOD has prepared an investment policy for the SDA
reecting the instruction by the National Treasury not to
invest the reserve funds of the SDA. The amendment
of the Defence Special Account Act is not currently
considered in the light of the possible repeal of the Act
and the inclusion of the conditions of the Act in the Public
Finance Management Bill.
| Financial Performance |
233 Annual Report FY 2008 - 2009